John Laing Infrastructure - steady and reliable track record

John Laing Infrastructure: This type of infrastructure fund should never set the pulse racing, but has its attractions as a form of ‘index-linked’ equity. Their assets (domestic and international) are spread across several sectors including hospitals, schools, social housing and street lighting, with an average contract life of around 20 years. These are the interim results to 30^th June 2014. The net asset value per share was 107p, up 0.2%, with the shares trading at 119.25p, around an 11.5% premium to NAV. (The NAV would have been up 0.8% except for sterling’s strength.) The interim dividend has been declared at 3.25p, making 6.625p likely for the year, an increase of almost 4% and resulting in a yield of just over 5.5%. So if the NAV creeps ahead at 2-3% with a starting yield of 5.5%, the implied total return per annum is a respectable 7.5% to 8.5%. There is a £150m revolving credit facility to allow a swift response to any acquisition opportunities, but this is currently undrawn. The main quibble at the moment is that it would be better to buy the stock when the premium to NAV is less than the current 11.5%, with the twelve month average being 8%. Overall though it is not surprising that the stock has a fan club amongst more cautious minded income investors. (1^st September 2014)

These comments are not a personal recommendation to deal. Any investments can fall as well as rise in value, so you could get back less than you invest. I may have a financial interest in some of the stocks written about. www.dividendpower.co.uk